Postal Service says it'll be broke by 2011

Nov. 13, 2010 12:00 AMWashington Post

WASHINGTON - The financially troubled U.S. Postal Service reported an $8.5 billion loss in the fiscal year that ended in September and said it will run out of money in 2011 if economic conditions don't improve and Congress doesn't act.

Financial losses also came from about $5.4 billion in obligations to pre-fund retiree health benefits and about $2.5 billion paid to the federal government's workers' compensation insurance fund.

All federal agencies and the USPS, a quasi-federal outfit, have workers' compensation obligations to help fund four major disability compensation programs.

The historic losses occurred despite more than $9 billion in cost cuts in the past two years, including the elimination of about 105,000 full-time jobs, "more than any other organization, anywhere," USPS Chief Financial Officer Joe Corbett said Friday.

The Postal Service also announced Friday that it plans to deplete its $15 billion line of credit with the U.S. Treasury by borrowing the remaining $3.5 billion.